Oil dropped after Saudi Arabia said it doesn’t expect a production accord to be reached when OPEC ministers meet Wednesday, but left open the possibility of a deal when they gather in November.

Futures fell 2.7 percent in New York, continuing the gyrations of recent days. Saudi Oil Minister Khalid Al-Falih said several potential freeze pacts are being discussed, but that agreement in Algiers is unlikely when ministers meet informally Wednesday. Iran, Nigeria and Libya "have special conditions," Falih said. Influential forecasters gave a worsening outlook for the market, with the head of the International Energy Agency saying supply and demand won’t be in balance until late 2017 and Goldman Sachs Group Inc. cutting its fourth quarter price forecast.

"The market was falling with the growing realization that there will be no effective OPEC deal, then helped along by the IEA acknowledging the glut persisting through 2017," said Sarah Emerson, managing director of ESAI Energy Inc., a consulting company in Wakefield, Massachusetts.

Oil has fluctuated since rallying in August on speculation major producers will agree on ways to stabilize the market when they meet Wednesday. While Saudi Arabia offered last week to pump less crude if Iran caps output, neither of the neighboring countries expect an agreement this week. Freezing output was first proposed in February, but a meeting in April ended with no final accord.

Saudi Offer

West Texas Intermediate for November delivery dropped $1.26 to $44.67 a barrel on the New York Mercantile Exchange. Prices have averaged about $44.80 this quarter.

Futures rose from the settlement after the industry-funded American Petroleum Institute was said to report U.S. crude supplies fell by 752,000 barrels last week. November WTI traded at $44.84 at 4:45 p.m. in New York. The API estimate contrasts with a Bloomberg survey estimating stockpiles would increase by 3 million barrels.

Brent for November settlement slipped $1.38, or 2.9 percent, to $45.97 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude closed at a $1.30 premium to WTI.

Moving Slowly

"The fundamentals are slowly moving, so headlines are punching above their weight," said Harold “Skip” York, vice president of integrated energy at consulting firm Wood Mackenzie Ltd. in Houston. "Rumors are what moves the market now in the short term."

Saudi Arabia offered to cut production to January levels, according to Algeria’s Energy Minister. That would remove about half of the kingdom’s 1 million barrel-a-day increase in output since it led OPEC’s push to defend market share in 2014. The U.A.E. supports a deal to freeze output if other nations agree, but production cuts are not up for discussion, Oil Minister Suhail Al Mazrouei said.

"The market is acutely focused on the headlines from Algiers," said Adam Wise, who helps run a $7 billion oil and natural gas bond and private equity portfolio at John Hancock in Boston. "Prices are down today because people don’t think there will be a consensus reached at the meeting."

Iran’s Share

It’s “not on our agenda” to reach agreement at the OPEC talks in Algiers, Iranian Oil Minister Bijan Namdar Zanganeh said in the Algerian capital. Negotiations will be a “warm up” for the November meeting in Vienna, Iran’s oil ministry news service Shana reported, citing Zanganeh. Iran, which pumped about 3.6 million barrels a day last month, is seeking a 12 to 13 percent share of OPEC’s market, he added. That would equate to as much as 4.4 million barrels a day, according to data compiled by Bloomberg.

OPEC hasn’t published individual targets for its members since October 2006, when the organization set a quota for Iran of 4.1 million barrels and one for Saudi Arabia of 9.1 million barrels.

"The main goal of OPEC is to show that it’s relevant again," said Bob Minter, a Philadelphia-based investment strategist at Aberdeen Asset Management, which oversees $402 billion. "The most likely scenario is that they will come out of the meeting with a statement pledging to cooperate, but without any specified cuts.

Weakening outlook

A global oil surplus of 400,000 barrels a day is anticipated in the fourth quarter 2016 after a 300,000 barrel-a-day draw forecast earlier, Goldman Sachs analysts wrote in a research note Tuesday. The supply-demand balance is weaker due to higher third-quarter production and clarity on new project delivery, they said.

"The market is re-balancing, but at a much slower pace than is usual," York said.

Oil-market news:

The oil market is trending in the right direction and fundamentals will require higher prices in the long term, said Saudi Arabia’s Falih.

U.S. crude stockpiles probably rose by 3 million barrels last week, according to a Bloomberg survey before an Energy Information Administration report Wednesday. That would be the first gain in four weeks.